Mortgage question

[mharr7]

Originally posted by: squirrel dog
30% is high , 50% is what crushed the housing industry.One misstep and you will be behind on your mortage,two or more and you default.25% is as high as you need to go.

I see what you're saying, and even agree with it...However, in my area, 25% is impossible for me. Thats 500 a month. You can't even rent for that in this city. A few years ago, we had a 500 sq ft apartment with a window unit for AC(keep in mind, this is florida, window unit didn't do much at all in the summers), and I think they're over 500 now. I will never, ever go back to that.


I should note im living at home right now, so im not making monthly payments. Just really ready to move out, which is why im looking. So renting is pointless, cause its free at home right now. FYI

 

[DannyLove]

Originally posted by: mharr7

Originally posted by: squirrel dog
30% is high , 50% is what crushed the housing industry.One misstep and you will be behind on your mortage,two or more and you default.25% is as high as you need to go.

I see what you're saying, and even agree with it...However, in my area, 25% is impossible for me. Thats 500 a month. You can't even rent for that in this city. A few years ago, we had a 500 sq ft apartment with a window unit for AC(keep in mind, this is florida, window unit didn't do much at all in the summers), and I think they're over 500 now. I will never, ever go back to that.


I should note im living at home right now, so im not making monthly payments. Just really ready to move out, which is why im looking. So renting is pointless, cause its free at home right now. FYI

I don't know how old you are but MILK this as much as you can. Don't put yourself out there and have to beg for help later. If I was still living with my parents and I knew what I do now, all I would be doing is SAVING SAVING SAVING!

Anyways, good luck, I recommend you take your time and not jump into anything just yet. You are trying to convince yourself into this which can become a bad thing.

 

[mharr7]

Originally posted by: DannyLove

Originally posted by: mharr7

Originally posted by: squirrel dog
30% is high , 50% is what crushed the housing industry.One misstep and you will be behind on your mortage,two or more and you default.25% is as high as you need to go.

I see what you're saying, and even agree with it...However, in my area, 25% is impossible for me. Thats 500 a month. You can't even rent for that in this city. A few years ago, we had a 500 sq ft apartment with a window unit for AC(keep in mind, this is florida, window unit didn't do much at all in the summers), and I think they're over 500 now. I will never, ever go back to that.


I should note im living at home right now, so im not making monthly payments. Just really ready to move out, which is why im looking. So renting is pointless, cause its free at home right now. FYI

I don't know how old you are but MILK this as much as you can. Don't put yourself out there and have to beg for help later. If I was still living with my parents and I knew what I do now, all I would be doing is SAVING SAVING SAVING!

Anyways, good luck, I recommend you take your time and not jump into anything just yet. You are trying to convince yourself into this which can become a bad thing.

Ya i hear ya...im 25 btw....25 and living at home really sucks. reason im still here is I actually moved out about an hour and a half away with my SO, but she ended up moving 1300 miles to go to school after we lived for a year...broke up, came back home. Been here about a year and ready to get the hell out. Sucksssss

 

[LS21]

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

im in line with this thinking

my rent is 13% gross, 25% of net.

very comfortable. if i were to increase it to double my rent, i would for sure require TWO roomates. and if the roomates were to move out? id be quite fucked

 

[oznerol]

What % do you have to put down on the home?

Where's the location?

 

[HardcoreRobot]

at some point the percentages dont really work anymore and you have to look at the absolute numbers.

 

[mharr7]

Originally posted by: ducci
What % do you have to put down on the home?

Where's the location?

~10%, give or take a bit...
As far as location, what do you mean? You mean locally, or where do I live? I'm in Gainesville, Fl. If you know the area, its in Weatherly on 23rd, near Ft. Clark

 

[oznerol]

Originally posted by: mharr7

Originally posted by: ducci
What % do you have to put down on the home?

Where's the location?

~10%, give or take a bit...
As far as location, what do you mean? You mean locally, or where do I live? I'm in Gainesville, Fl. If you know the area, its in Weatherly on 23rd, near Ft. Clark

Yea, I just meant the state, really.

Is the 10% down payment the entirety of your savings? If you put that down, will you still have enough in savings for furnishing the house? Closing costs? 2+ months emergency income ($4,000+)?

Similar situation, and it sucks. But seems like you 1) need to save more and ideally 2) need to make more.

I'd start asking your OP question once you have ~25% for a down payment + other expenses. Then the 50% of your take home pay won't hit so hard.

Edit: Basically - you don't want to put yourself in a situation where you have no savings, no emergency funds, and are living paycheck-to-paycheck to pay your bills.

 

[Oceandevi]

Originally posted by: Deeko

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

That's what I was told - your response is so detailed and informative though, thank you for educating me with your 3 character answer!

no

 

[Capt Caveman]

OP - what are you paying currently for rent?

$1,000 for mortgage, taxes, insurance and pmi is pretty damn good. Add rental income from a roommate, I definitely think it's doable.

 

[Deeko]

Originally posted by: Oceandevi

Originally posted by: Deeko

Originally posted by: Ocguy31

Originally posted by: Deeko
Being 24 and not owning a house, I don't actually know, but isn't the traditional logic that your mortgage shouldn't be more than 1/4 of your monthly take home pay? Basically a week's paycheck?

No.

That's what I was told - your response is so detailed and informative though, thank you for educating me with your 3 character answer!

no

I'm sure you're expecting a response about how your answer was even fewer characters - instead I'm just going to mock your intelligence for providing an answer when there was no question asked. Nice work, sport!

 

[cHeeZeFacTory]

50% of your take may equate to like 0 savings per month if you add in expenses. Utilities (electric, trash, internet, tv, etc) easily runs 150 - 200 per month. For me, even when I'm frugal, I have to spend 200 - 300 per month on food. Throw in entertainment, misc purchases, car payments, car insurance, I don't know how you're going to have any savings.

How are you going to save for anything else? like vacation, TV's, new car, etc...

I would use something like MS Money, or even better, Mint.com and calculate your expenses per month. But 50% sounds awfully high.

 

[mharr7]

Originally posted by: Capt Caveman
OP - what are you paying currently for rent?

$1,000 for mortgage, taxes, insurance and pmi is pretty damn good. Add rental income from a roommate, I definitely think it's doable.

$0....I'm back at home for the time being...

 

[mharr7]

Originally posted by: cHeeZeFacTory
50% of your take may equate to like 0 savings per month if you add in expenses. Utilities (electric, trash, internet, tv, etc) easily runs 150 - 200 per month. For me, even when I'm frugal, I have to spend 200 - 300 per month on food. Throw in entertainment, misc purchases, car payments, car insurance, I don't know how you're going to have any savings.

How are you going to save for anything else? like vacation, TV's, new car, etc...

I would use something like MS Money, or even better, Mint.com and calculate your expenses per month. But 50% sounds awfully high.

Ive heard about mint.com before....But don't you have to put in all your account information and stuff? I understand its a reputable site, but that's still scary to me...

 

[DannyLove]

Originally posted by: mharr7

Originally posted by: DannyLove

Originally posted by: mharr7

Originally posted by: squirrel dog
30% is high , 50% is what crushed the housing industry.One misstep and you will be behind on your mortage,two or more and you default.25% is as high as you need to go.

I see what you're saying, and even agree with it...However, in my area, 25% is impossible for me. Thats 500 a month. You can't even rent for that in this city. A few years ago, we had a 500 sq ft apartment with a window unit for AC(keep in mind, this is florida, window unit didn't do much at all in the summers), and I think they're over 500 now. I will never, ever go back to that.


I should note im living at home right now, so im not making monthly payments. Just really ready to move out, which is why im looking. So renting is pointless, cause its free at home right now. FYI

I don't know how old you are but MILK this as much as you can. Don't put yourself out there and have to beg for help later. If I was still living with my parents and I knew what I do now, all I would be doing is SAVING SAVING SAVING!

Anyways, good luck, I recommend you take your time and not jump into anything just yet. You are trying to convince yourself into this which can become a bad thing.

Ya i hear ya...im 25 btw....25 and living at home really sucks. reason im still here is I actually moved out about an hour and a half away with my SO, but she ended up moving 1300 miles to go to school after we lived for a year...broke up, came back home. Been here about a year and ready to get the hell out. Sucksssss

Never move in with your "SO" between the ages of 18-25. You failed there.

 

[dullard]

My advice:
1) Stay at home a few more months or a year.
2) Pocket the $1000/month that you would be paying.
3) Use that $1000/month to pay off your car and to build up a down payment for the house.
4) When you are ready to buy, you will have saved enough to avoid PMI, this will save you another $100/month.
5) The specific house will be gone, but a very similar one will be available then.

There is no reason to rush (do keep an eye on the stimulus bill though to see if that may help you at the end of this year). The buying market probably won't be any worse in a year than it is now (although I didn't look up your specific location).

 

[BurnItDwn]

It's certainly doable to buy a house with a 1000 mortgage with 2000 take home (assuming 1000 includes escrow for prop tax and any PMI and also homeowners insurance payments.) When I purchased my first townhouse my payment (mort + pmi + tax + ins) was about 900 per month, then I also had a monthly assessment of about $150. My take home was just over 2K (because I had money being deducted towards stock purchase plan, retirement plan, and percentage going directly into emergency fund) ... Money was VERY tight, but I did all right at the time. Also, I paid off my car payment before I purchased the house. This was an 1100sq foot townhouse. 2 bedrooms, 1.5 bath, 2 floors, no basement ... built in the 70s. My Gas bill was usually about $60 per month, the Electric bill was usually around $100, water and sewage costed around $30, I had WOW cable and internet, it was about $90 or so per month, and my Cell phone was around $50.

If I was doing it all again, I would probably rent a 2 or 3 bedroom apartment and split it with a roommate (3 bedrooms would be nice just to have a dedicated room for an office/computer room .... then put the $500 or $600 that I was saving towards a bigger down payment.

 

[Deviant Grasshopper]

Here's my opinion -

I bought a home when I was ~19-20. I thought I knew exactly what I wanted and all that. I was very careful to buy a home that was "in" my price range at the time.

Within two years I was making almost double as when I bought the house. Over the next 2-3 years I really regretted buying a home where the payments are only ~15% of my take home pay and wished I had purchased something nicer, in a better neighborhood, or not in a neighborhood.



.....and now I'm beyond glad that I bought within my means and didn't buy a more expensive house. IMHO no matter what you buy, your needs will change in ~10 years.